The S&P/TSX Composite Index closed 3.59% higher last week. The Dow Jones Industrial Average gained 2.96%, the S&P 500 climbed 3.36% and the Nasdaq Composite rose 4.44%.
Here’s a closer look:
Easing Middle East tension lifted markets
The holiday-shortened week opened with mixed results on Monday, as the outlook for an end to the Middle East conflict remained unclear. Before markets opened, U.S. President Trump used his social media platform to state that “great progress has been made” with a “new, and more reasonable regime,” in Iran. In what’s become a familiar pattern, though, the U.S. leader also said, if a deal wasn’t reached soon, the U.S. would be “blowing up and completely obliterating” Iranian power plants. The Dow gained 0.11%, while the S&P 500 and the Nasdaq fell 0.39% and 0.73%, respectively. Canada’s TSX ended 0.1% lower, with a 1.4% decline in the tech sector weighing heaviest on performance.
An overnight report that President Trump told aides he was willing to end U.S. military action in Iran sparked a market rally on Tuesday. A mid-day update from the Middle East quoted Iran’s president, Masoud Pezeshkian, as saying his country has “the necessary will to end the war,” which further fuelled investor optimism. The Dow surged 2.5%, the S&P 500 climbed 2.9% (its largest daily gain since May 2025) and the Nasdaq topped performance with a 3.8% advance. The TSX gained 2.6% – its best daily performance in almost a year.
Tuesday also marked the end of the month and Q1. March saw the TSX suffer its biggest monthly decline in nearly three years, while the S&P 500 and the Dow turned in their worst quarter since 2022.
Ahead of his televised address Wednesday evening, President Trump told Reuters news agency that the U.S. will be “out of Iran pretty quickly.” It was enough to keep markets in rally mode, led by big tech with shares of Alphabet Inc. rising 3.4%, while Meta Platforms and Amazon each gained over 1%. The Dow closed 0.48% higher, the S&P 500 was up 0.72% and the tech-heavy Nasdaq gained 1.16%. The TSX rose 0.6%.
In his speech, President Trump said the U.S. was “nearing completion” of its goals in Iran but would strike “extremely hard” to finish the campaign. This helped the Wall Street indexes end a five-week slide on Thursday. The S&P 500 gained 0.11% for the day and 3.36% for the week. The Nasdaq gained 0.18% and 4.44%, respectively. The Dow fell 0.13% Thursday but ended the week 2.96% higher. The TSX gained 0.5% on the day, and 3.6% for its biggest weekly gain since November.
Canadian GDP and trade data were in focus
Canada’s economy showed modest but encouraging momentum early in the year, helped by strength in goods producing industries. Statistics Canada reported Tuesday that real gross domestic product (GDP) edged up 0.1% month-over-month in January, beating expectations for flat growth. The agency’s flash estimate for February pointed to a further 0.2% increase. The preliminary data has economists estimating first-quarter GDP growth between 1.4% and 1.8% – in line with the Bank of Canada’s most recent forecast. Mining, oil, and gas extraction and quarrying expanded 1.2%, leading January’s growth. Construction activity also continued to improve, growing 1.1% and posting a third consecutive monthly gain.
The Canadian trade deficit surged to a six-month high in February, according to Statistic Canada’s balance of trade data, released Thursday. Led by a 45.6% jump in metal and non-metallic mineral product imports, the trade deficit expanded to $5.74 billion, up from a revised $4.18 billion in January, and well above the forecasted $2.25 billion. Total imports increased 8.4% to $72.1 billion (an all-time high). Total exports rose 6.4% to reach $66.31 billion (the highest level since March 2025). Exports to countries other than the U.S. rose 10.5% in February, while exports to the U.S. dropped to 66%, down from 68% a month ago, and over 79% a year ago.
U.S. economic data pointed to steady momentum
The U.S. Commerce Department’s Census Bureau reported Wednesday that U.S. retail sales rose 0.6% in February – the largest increase in seven months. The increase is an improvement over the revised 0.1% decline in January, and also better than the 0.5% economists were expecting. Core retail sales, which excludes automobiles, gasoline, building materials and food services, advanced 0.5% in February, and were up from 0.2% in January.
Manufacturing data also showed modest improvement. The Institute for Supply Management’s purchasing managers’ index (PMI) edged up to 52.7 in March, marking a third straight month of expansion and its strongest reading since 2022. A PMI level over 50 suggests the manufacturing sector is growing, whereas a level under 50 indicates activity has slowed compared with the previous month.
Stay the course.
The market’s day-to-day ups and downs can be stressful. But it’s important to put market performance into perspective, while keeping your goals front and centre. Staying invested – and continuing to invest – throughout market fluctuations is the best way to capitalize on likely market recoveries. If you have questions about your investments, a Co-operators financial representative is always ready to help.
Canadian and U.S. economic data (April 10)
On Friday, two key data releases will offer insight into the health of the Canadian and U.S. economies. Statistics Canada’s March employment report will offer insight on job growth and the unemployment rate following recent signs of moderation. In the U.S., inflation data will take focus, as investors assess price pressures and implications for the Federal Reserve’s interest‑rate outlook.
More important dates
- April 28 to 29: U.S. Federal Reserve interest rate announcement
- April 29: Bank of Canada interest rate announcement
- April 30: 2025 personal income tax filing deadline
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